I would have thought this ludicrous if it came from anyone else. And I still don't know exactly how this unknown developer would go about proving the game's existence unless Microsoft was willing to let them show it publically--Halo is still their property. But yes, as others have noted, MS isn't in competition with the DS itself in any way. Even if they were, re-releasing a 6 year old product on it does nothing to hurt their franchise and does increase its appeal--possibly drawing more Wii users in to the Wii360 fold. If proof is coming, there's a chance it's because MS is willing to float a trial balloon and see what response they get.

So if there is a game out there, already in the playable stages, there is a chance for revival. Not knowing exactly what reasons it was killed for, it's impossible to say how much of a chance. Still, it's worth watching.